MULTIMEDIA UNIVERSITY SECOND TRIMESTER FINAL EXAMINATION, 2007/08 SESSION QUESTIONS WITH S TMI3411 MULTIMEDIA INFORMATION STRATEGIC PLANNING (All Sections/Groups) XX JANUARY 2008 XX:XX am XX:XX am (2 Hours) INSTRUCTIONS TO STUDENTS 1. This examination paper consists of 2 sections (Section A and Section B). The total number of pages for this document is 4 pages including the cover page. 2. Section A consists of 2 questions while Section B consists of 3 questions. Each question carries an equal score of 15 points. 3. You are required to answer a total of 4 questions. You must answer 2 questions in Section A. You are to choose 2 out of 3 questions in Section B. 4. The total score for this examination paper is 60 points. WRY Page 1 of 10
SECTION A ALL QUESTIONS A1 Information, Communications & Technology (ICT) Strategic Plan (a) Describe the basic steps in the development of an ICT strategic plan applicable to both profit and not-profit organizations. The basic steps in the development of an Information, Communications and Technology (ICT) strategic plan for any organization are listed as follows: (1) State the vision, mission and objective statements with regards to the importance and contribution of ICT to the organization s business (2) Define the future needs of ICT aligned with the organization s strategic plan to support its future business processes and challenges (3) Identify current status of the ICT environment in the organization using appropriate planning tools like Strengths, Weaknesses, Opportunities and Threats (SWOT), Value Chain Analysis (VCA) and Critical Success Factors (CSF). Determine specifically the ICT gaps between the current and future needs of the organization (4) Find solutions to bridge the ICT gaps by a combination of activities like conducting brainstorming sessions, seeking expert advice from employees or consultants who are well versed in the organization s business (5) Formulate the strategic plan by selecting ICT solutions with the highest priorities and delivering the most valuable impacts to the success of the organization in the future. Establish critical Key Performance Indicators (KPI) to monitor the strategic actions that evolved from the plan. (b) Provide three (3) reasons why accurate and reliable information is very important in the SWOT process. SWOT, the well known abbreviation for Strengths, Weaknesses, Opportunities and Threats, is a strategic planning and analysis tool used by organizations to identify the current internal state of the organization s strengths and weaknesses, and the state for opportunities and threats to the organization from the external environment. The three (3) of the many reasons for the importance of having accurate and reliable information for SWOT are: (1) to make sure that the information in SWOT are really true facts e.g. when an organization says that it is strong in certain areas, that strengths must be true. Otherwise people will be doing analysis and planning on wrong facts. This would not make the strategic actions successful. WRY Page 2 of 10
(2) to make sure that the numbers used in SWOT are accurate e.g. if an organization says that it is currently in fifth (5 th ) place with a certain percentage of the market share, that information must be accurate. Otherwise the target setting in the strategic plan for market share may not be achievable because of inaccurate planning facts. (3) to make sure that all gathered data in SWOT on the external environment like customer behaviours and competitor information are reliable e.g. if we were to come up with a strategic action to influence the customer to favour us based on gathered information that is wrong, we certainly will not succeed in our strategic plan. (c) Explain by providing three (3) reasons why people incorporate KPIs in the formulation of strategic plans. [3 points] KPI, the well known abbreviation for the term Key Performance Indicator, is a measurement, evaluation, and target setting tool used in strategic planning. The three (3) of the many reasons for the incorporation of Key Performance Indicators in the formulation of strategic plans are: (1) to set up performance targets to be achieved that are SMART (Specific, Measurable, Achievable, Realistic and Time-bounded) e.g. to achieve a 20 percent share in the industrial chemicals market for product A through e-marketing by the end of year 2008. (2) to monitor the performance of implemented strategic actions whether their effects had indicated success or failure of the strategy (3) to provide a means to measure the performance of an organization, or the performance of a department within an organization with regards to the level of achievement against a set of KPIs agreed during the formulation of the strategic plan. A2 Organization s ICT Infrastructure Safety and Security Planning (a) Explain three (3) techniques to prevent unwanted intrusions that may attack the organization s ICT infrastructure. The three (3) techniques that can be used to prevent unwanted intrusions into the organization s ICT infrastructure are: (1) Set up a firewall and proxy system, for example one that redirects well known ports to different internal port numbers which are not known to the external user. This will ensure that communications from internal computers to the outside world are shielded (secured) from directly affecting the computers. Similarly, all accesses to the outside world shall WRY Page 3 of 10
(b) be through the proxy server. Therefore, any damage from unwanted intrusions will be limited to the proxy server. (2) Set up of a virtual private network (VPN) with password authentication and accepting only the IP addresses of known and registered computers. Other non registered computers will be denied access to the network. (3) Deploy only applications that use strong encryption (e.g. private and public keys) for communications between computers inside the organization. This will ensure that intruders cannot read (snoop, pry, spy, watch) confidential information about the organizations business for data in transit during communications between computers. Provide three (3) impacts of identity theft in the context of ICT. Identity theft is the act by someone using your personal information without your knowledge to commit fraud or theft. The three (3) examples of impacts of identity theft are: (1) A person who stole your bank account password and knows your bank account number can impersonate your identity to withdraw money from your account without your consent. You ended up losing your money. (2) A person who stole your credit card and knows your good credit details can impersonate your identity to take loans, buy houses, cars and other luxuries, etc using the strength of your credit rating. The banks will be chasing after you for the bad loans. (3) If the identity stolen provides access to computers that hold that confidential information, the identity thief can go into the computers to create disaster like changing the police record of some people from being a good person to a convicted murderer or rapist on parole, changing the university course grades from A to F, or changing a person s name into the name of some dead person, changing the gender data from male to female, etc. It is going be havoc if you have to go to court to prove who you are. Not being able to prove your identity means they can take away your house or your wife, and many more. (c) Give three (3) examples of ICT policy statements that will help ensure safety and security of the organization s ICT infrastructure. [3 points] (1) Every employee is responsible to ensure that their working ICT equipment (e.g. computer, desktops, PDAs, etc) are running with the latest anti-virus updates provided by the company. (2) Employees shall not use unauthorized software and those not approved by the company. WRY Page 4 of 10
(3) Employees shall not indulge in any unauthorized communications using the company s ICT infrastructure for unofficial work like personal internet messaging - chats, spreading of political beliefs - emails, etc. SECTION B ANY 2 OUT OF 3 QUESTIONS B1 Strategic Planning & Analysis Tools Value Chain Analysis (VCA) (a) Explain how the Value Chain Analysis (VCA) process is being used in strategic planning of ICT systems. You may illustrate using a suitable example. The Value Chain Analysis (VCA) process is a strategic planning tool that looks into the series of activities in the business process of an organization for activities that have value in the chain. The chain is the connectivity network among the various activities in the business process. Normally, activities are categorized into primary and support activities. By analyzing the entire business processes, the VCA methodology looks for activities along the chain or chains that truly provide value to the final product or output. These activities, usually primary, are either retained, or sometimes modified and enhanced. Those activities that do not provide value, usually support activities, may be removed completely, or incorporated and blended into existing ones that give total added value. Sometimes a new, more effective and efficient activity is introduced in the chain to replace several non-value added activities. For example, in the production of a car accessory, the company currently executes the manufacturing through a chain of activities starting from the procurement of raw materials, processing through the molding machine, then through some other activities, all the way to the spray painting, labeling and final packaging. Assume the case that the last three activities, currently done manually using human labour, when analysed through the VCA method could now be replaced with just one activity through the introduction of a new computer controlled automatic product packager. This change gives more value to the end product like reducing the overall cost to manufacture, able to incorporate flexible design, can change paint colors fast, can print labels fast, can run 24-hours, does not request for work leave like humans, etc. So for this example (e.g. car accessory manufacturing above) we know that the change in activities will result in a change in the ICT facilities and applications to support this new business process. If the business strategic plan demanded the use of the new computer controlled automatic product packager, then the ICT strategic plan must take this into consideration to be aligned to the needs of the business. (b) Provide three (3) reasons why it is important that the various business units or departments in an organization agree on the outcome of the VCA process. WRY Page 5 of 10
The decision to come out with the final outcome of the VCA process normally needs agreements of the various business units or departments in the organization because: (1) most activities in the entire business processes involve many parties (e.g. business units) who are responsible to carry them out. You must get their agreement to say that some activities in the process chain need to be removed or replaced. Many people will feel uncomfortable especially Heads of Business units, when decisions are made that some of the things they currently undertake do not add value to the process chain and had to be dropped. It is painful but that is a necessary part of life when the way we conduct business today must change to meet with the stiff competition out there. (2) when the business units are involved with activities that must be removed, for example, they have to be responsible for their people doing their current jobs like move them to the other departments, retrain or do other jobs, or close down the current business unit completely. (3) when the activities in the chain will be replaced by new machines, for example, they will have to agree to have their current business unit expanded, provide training for the new activity in the process chain, or create a new business unit to handle the new activities, etc. (c) Business objectives and strategies of an organization are the products of a number of considerations. List three (3) of those considerations based on the What Choice principle. [3 points] (1) what the organization might do based on the environment it currently operates or by moving into new environments (2) what the organization wants to do based on the values and views of the senior executives or stakeholders of the company (3) what the organization must do if it is to survive in the environment with so much competition (i.e. Critical Success Factors, or CSF) (4) what the organization can do based on the organization s resources and capabilities. B2 Strategic Planning & Analysis Tools Critical Success Factors (CSF) (a) Describe how the Critical Success Factors (CSF) process is being used in strategic planning of ICT systems. You may illustrate using a suitable example. WRY Page 6 of 10
(b) The critical success factors are the limited number of areas that when successfully executed, will result in the successful performance of the organization. These are the few key areas where things must go right for the organization to be successful in the competitive environment. These areas cannot be omitted in the strategic plan. For example, in the freight delivery business like DHL, the execution speed and availability of storage warehouses for goods in transit are two critical success factors. You must perform freight delivery fast and you must have sufficient warehouse space to temporarily store goods you are delivering. These two areas are really critical for you in running your freight delivery business. Having a very good Human Resource (HR) manager is important but not critical to this business, i.e. as long as you have one HR manager. Your business process activity is directly dependent on your execution speed and ample storage space for your goods. So your ICT strategic plan must include considerations of applications that help you manage your freight delivery fast and administer goods in transit accurately in your warehouse. The strategic actions on these two areas ensuing from your ICT strategic plan are therefore critical to the success of your freight business. Describe three (3) methods or considerations that you can use to identify the CSF for your business organization. (1) consider your core business if you are involved in creating ideas, concepts and printing of product advertisements, make sure that you are very good at the things you really do. There is no point in concentrating on the display of advertisements on the billboards. Let the experts do them. Hire them to do the jobs. They have labor and equipment, and have been doing displays for a long time. You core business is creating and printing advertisements and not the displaying them, which is best left to others good at it. Concentrate on your critical success factors i.e. creating and printing only. (2) consider what makes your main clients happy if your clients are getting freebies (gifts) from your competitors, then consider strategies to counter the impacts of the competitors on your present clients. This counter strategy is critical to your business success (survival) because you may lose your main clients forever and they are the bulk of your current source of income and business. You may end up bankrupt if you lose your main clients. This is a critical success factor maintain existing main clients. (3) consider what the customer environment is looking for If you anticipate new changes in technology coming and you customers want them, then you must prepare early to survive. For example, customers currently pay by checque which is a manual process; you may consider direct bank account credits or debits using the internet no more paperwork moving around between you and your clients. This is a critical success factor. If you are not up to it and not acting fast on it, your clients may go to your competitors who provide those facilities. WRY Page 7 of 10
(c.) Explain why the CSF are limited to only a few areas of consideration. You may illustrate using a suitable example. [3 points] If there are many critical success factors identified for the business, (like about ten (10) areas or more), then certainly these many areas should not be considered critical success factors any more. Normally the number of critical success factors should be less than five (5), which we call a few. The example below illustrates this point. For example, if you have a patient in the hospital in the intensive care unit (ICU), you expect the doctor to tell you something like - the patient will need to overcome say two (2) issues like the low breathing rate and high blood pressure to ensure that the patient has a chance of survival. These two areas are the critical success factors for the patient. On the other hand, if the doctor tells you that the patient needs to overcome ten (10) or more critical issues for his survival, then it is best said that the patient is close to good as dead or near death. The doctor should have said that the patient had so many problems critical to survival, that we only pray to God do a miracle. That is, it makes sense only to have a few critical success factors and not many. In this case you can assume that the patient is your business organization. B3 Strategic Evaluation & Monitoring Tool - Balanced Score Card (BSC) (a) Explain how the Balanced Score Card (BSC) process is being used in strategic planning of ICT systems. You may illustrate using a suitable example. [7 points] The Balanced Score Card (BSC) is a strategy evaluation and control technique. It is not a strategy formulation technique. The name BSC is derived from the perception of an organization s need to balance financial measures, usually used exclusively in strategy evaluation, and control with non-financial measures such as product quality and customer service. The overall aim of BSC is to essentially balance the shareholder objectives with customer and operational objectives. For example, to manufacture a product of high quality you need high quality raw materials and high quality product designs. To achieve these two factors, you need to spend more money as high quality raw materials cost more and good product designers demand high salaries. You have therefore increased your overall cost of the product (the financial measure) at the same time you have increased your product quality. Now somebody must make the decision on how to balance these two opposite and inter-dependent issues one is the increase in product quality (which is good) while the other is the increase in product cost (which is not good). The management and shareholders must therefore decide which way to go i.e. the business objectives. A strategy must be put in place to evaluate and control the balance between these two issues. WRY Page 8 of 10
Ensuing from these strategic business objectives, the ICT infrastructure and strategic plan to support the new business operations must also be incorporated accordingly. (b) Describe the four (4) mandatory perspectives of the Balanced Score Card (BSC) for an organization. [4 points] (1) Organization financial performance e.g. data in numbers regarding profits generated, manufacturing costs and other factors like borrowings, loans, etc to run the business. (2) Customer perception e.g. customers believe that our products are of high quality standards, meet their diverse needs, priced accordingly, etc. (3) Internal business process e.g. efficient manufacturing process like 200 units per day output, energy cost RM 0.35 per unit, and equipment maintenance cost averaging RM 2.50 per unit, etc. These numbers reflect efficiency when compared to other manufacturers in the same business. (4) Internal learning and growth e.g. the measure of human resource capabilities in the organization. The increase in skills, knowledge and competency for product engineering through research and development, competence in sales and marketing, the continuous learning programs implemented by the company for staff, etc. (c) Give four (4) examples, one each on how the four (4) perspectives of the BSC are being measured, scored and evaluated. [4 points] In the BSC process, the management in the strategic action plan must first set all the detailed criteria for performance measures of the 4 perspectives: - what to measure, how to measure, what scale to use, what score to give for a particular performance, etc. (1) Financial measure There can be many financial measures. Take the case of the profit target. For example, based on a strategic financial profit target of RM 10 million for the year ending 2008, if the organization only achieved RM 4.5 million in profit then a score of 0.45 shall be given to this attribute according to the agreed criteria. (2) Customer perception measure Take the case of one measure, the customer product satisfaction survey. For example, if the strategic target set by management is to reach the level of 8 out of a scale of 10 and the survey results give an average of 6 out of 10, then the customer perception score is the percentage of the actual average against the set target, again according to the agreed criteria. WRY Page 9 of 10
(3) Internal business process measure Take the case of one measure, cost of energy index. If the cost of energy achieved by the manufacturing process per unit is say RM 0.26, and checking this through the table of scores set by the management gives a score of 0.75, then 0.75 is the score for this energy index. If the cost of energy is lower say RM 0.20 per unit, again checking this through the scoring table we may get a score of 0.82, which is much higher because of better energy efficiency. (4) Internal learning and growth measure Similarly, the management may set a strategic learning and growth measure, like the number of days for technical training for each staff in the organization. If the strategic target set is 5 training days minimum per year for each employee, and by the end of the year the achievement is only an average of 4 days per year for all employees, we would score 80 percent or 0.8 for this attribute. The overall BSC score for the organization is the sum of the weighted average of the scores of the 4 perspectives above using a pre-agreed set of weights set by the management of the organization. Nowadays most organizations implement special application software to conduct this BSC calculations online and in real time for all managers and employees to see. This is one way ICT has been directly used in the real live performance management and evaluation of an organization. End of document. WRY Page 10 of 10